Use the information below to answer questions 9 -11. During the year ended Decem
ID: 2597750 • Letter: U
Question
Use the information below to answer questions 9 -11.
During the year ended December 31, 2017, a nonprofit entity received the following donated services:
An architectural firm donated its services by developing the building plans leading to the construction of a wing to the nonprofit entity’s central administration building. The fair value of the donated services was $75,000. At December 31, 2017, the wing was 80% completed.A local legal firm provided counsel to the nonprofit entity by assisting the nonprofit and one of its wealthy donors on a trust agreement that would benefit the nonprofit after the donor’s death. The services normally would have cost the nonprofit $10,000, but the legal firm donated their services on the trust agreement.A group of high school students volunteered 100 hours of their time to cleaning the central administration building. The fair value of the donated services was $1,000.
9. As a result of the donated services, the nonprofit entity’s assets would increase by
A.$60,000.
B.$75,000.
C.$76,000.
D.$85,000.
E.$86,000.
10.As a result of the donated services, expenses would increase by
A.$10,000.
B.$11,000.
C.$85,000.
D.$86,000.
11.As a result of the donated services, unrestricted net assets would increase by
A. $60,000.
B. $75,000.
C. $76,000.
D. $85,000.
E. $86,000.
12.Which of the following statements is correct?
A.The emphasis in financial reporting for nonprofit entities is on resource restrictions.
B.Net assets controlled by the governing board of a nonprofit entity are always classified as unrestricted.
C.A and B.
D.Neither A nor B.
Explanation / Answer
9) Option (C) 76,000
75000 + 1000 = 76000
10) Option (A) 10,000
11) option (B) 75,000
12) Option (C) A And B
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